On May 2, 2025, Mahindra & Mahindra Financial Services Limited (MMFSL) took a significant step to strengthen its capital position by approving a fresh resolution for a Rs. 3,000 Crore rights issue. This decision supersedes the earlier resolution passed on February 13, 2025, as the company seeks to avail benefits from the newly introduced SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025. The purpose of this rights issue is to maintain a strong capital adequacy ratio in light of the company’s ambitious growth plans, particularly to augment its Assets Under Management (AUM).

MMFSL has been on a growth trajectory, especially in the secured asset portfolio, with a compound annual growth rate (CAGR) of 20% in AUM. The company has also maintained strong asset quality, with Gross Stage 3 (GS3) assets staying under 4% for the fiscal year 2025, which has positively impacted credit costs, keeping them below 2%. These achievements underscore the company's commitment to financial discipline and growth in India’s rapidly expanding domestic consumption market.

The rights issue, approved by the Board today, will see the issuance of fully paid-up equity shares of face value of Rs. 2 each. This fund-raising initiative will primarily be directed at enhancing MMFSL’s Tier 1 capital by over 200 basis points, which will significantly support its growth aspirations in the coming years. This capital infusion will enable MMFSL to capitalize on emerging opportunities and continue its leadership position in the financial services sector.

It is important to note that the rights issue will be conducted in accordance with the new simplified regulations from SEBI. These regulations are designed to make the process more time-efficient, cost-effective, and process-efficient, thus making it easier for MMFSL to raise the capital needed for its expansion plans.

The key focus areas for the company moving forward will include continued expansion in rural and semi-urban markets, with an increasing number of customers benefiting from MMFSL’s financing services. The company’s diversified product offerings and AAA-rated financial profile make it a leading player in the non-banking finance company (NBFC) sector, particularly for India’s rural and agricultural markets.

The board meeting held today (2nd May 2025) was crucial for the company as it re-affirmed its growth trajectory and capital requirements. The rights entitlement ratio, issue price, record date, and other terms and conditions related to the rights issue will be determined by the Board or the Rights Issue Committee at a later stage, in line with applicable regulations.

This rights issue, alongside MMFSL’s strong financial track record, positions the company to continue its leadership in financing rural and semi-urban India, driving positive changes and supporting sustainable economic growth.

For detailed information, MMFSL's official website provides updates on its corporate actions and financial information, and investors are encouraged to visit the investor relations page for further details.

This disclosure is in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and is being made available on MMFSL’s website.

MMFSL continues to remain committed to enhancing stakeholder value through strategic capital management and expansion of its product portfolio, keeping a keen focus on the growth of India's financial services sector.

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